Economic Sector

Last updated: Wednesday, December 19, 2018

27 Tax Contents Amended to Fit Reality

Posted: Wednesday, September 23, 2015

As many as 27 tax contents need to be amended to fit reality, said the Ministry of Finance at a workshop titled “Collecting businesses’ opinions for draft amended Law on Tax” held in Hanoi by the Vietnam Chamber of Commerce and Industry (VCCI) in cooperation with the Tax Policy Department under the Ministry of Finance.

Vietnam is picking up the pace of international integration. The country has so far signed 10 free trade agreements (FTAs) and expects to conclude the Trans-Pacific Partnership (TPP) Agreement soon. Before new opportunities and challenges, the economy will continue to face numerous difficulties and challenges because of its low competitiveness, unpopular product brands, and little improved reputations of businesses. Besides, the supply and demand on world markets is developing increasingly complicated, thus placing heavier pressures on Vietnam’s export competitiveness. Hence, Mr Pham Dinh Thi, Director of Tax Policy Department under the Ministry of Finance, said that it is essential to have consistent solutions, particularly tax solutions, to support enterprises to overcome difficulties and stabilise production to meet actual requirements. It is also necessary to stimulate domestic production and business development.

With those goals, changes were proposed to 27 tax contents in seven tax laws: Nine contents in Law on Corporate Income Tax, four contents in Law on Personal Income Tax, three contents in Law on VAT, three contents on Law on Special Consumption Tax, six contents in Law on Tax Administration, one content relating to non-agricultural land use tax and one content related to environmental protection tax. Amendments and supplements must ensure development goals, development trends and international commitments to help sharpen the competitiveness of businesses and increase employment for workers. Also, it is necessary to ensure policy consistency and address shortcomings to ensure that the contents are simple, easy to understand, easy to implement to facilitate taxpayers and modernise tax administration, and prevent trade fraudulence and fight against tax loss.

However, some companies expressed concern over proposed contents. With respect to VAT, Ms Dang Binh An, Chairwoman of the Board of Members of C&A Tax Consultancy Company, said the draft has many contents distressing businesses, particularly tax refund. For example, tax refund is not applied to exports via trails and open crossings. However, in practice, many agricultural products can only export via these ways after they are harvested. Hence, she suggested that, instead of making all the same, authorities should classify commodities exported via these ways.

The hottest debate happened to special consumption tax on alcoholic beverages, Mr. Nguyen Van Viet, Chairman of the Vietnam Beverages Association, said that if the draft is ratified, excise tax on alcoholic beverages will be raised considerably. This move does not guarantee the stable growth of State budget revenue because the sector’s tax paid to the State Budget dropped 1.5 percent in 2013 and 16.1 percent in 2014, although special consumption tax was raised from 45 percent to 50 percent on beer and from 50 percent to 55 percent on spirits. Thus, he thought that there was no need to modify current regulations on other commodities, including wine and beer.

Before the recommendations and proposals from enterprises, Mr Pham Dinh Thi affirmed that amendments and supplements to tax laws will not have significant impact on budget collection, but primarily help stimulate production and business operations in key economic sectors, deal with difficulties and create a favourable and transparent investment environment. The Ministry of Finance will continue to host many meetings to collect opinions on tax policies and tax management to provide the most favourable conditions for the business community.